To go shopping is glorious – how brands can succeed on the Chinese shelf

27 November 2013 min read

By Derek Samuel and Mark Kennedy.

With 1.35 billion people and electrifying change happening across the country, China’s 1.35 billion throats and 2.7 billion armpits can seem too good to miss for foreign companies wanting to sell soft drink and deodorant.

For marketers, China offers a double-edged sword. On the ground, reality often seems very different from the hype. On one hand, huge pent up demand and rising income offer unprecedented opportunity.

On the other hand, Chinese consumer behaviour seems fickle and confusing. Products that perform brilliantly in other markets fail catastrophically in China and years of careful brand building can disappear like smoke in the face of an amateurish local brand.

China is different. Not impossible, confusing or hard. Just different.

China has a huge profile but a GDP per person about the same as Botswana. Many Chinese consumers have emerged from poverty and an environment with few creature comforts.

What they do believe is that the world is getting better, things are improving, products are getting better every day and that the world is filled with exciting change and innovation.

While the Chinese economy is slowing and unemployment rates in parts of the country are far higher than most in the west would dream of, momentum is on China’s side. Consumers expect brands to innovate, grow and become more popular. If they don’t, past glory, heritage and hard won reputation mean little.

How can a western brand succeed in an ever-changing China?

The first step, as always, is to understand the consumer behaviour: who they are, where they are and where they shop.

But be wary. What is less important is that ubiquitous question: what do they want? If a Chinese consumer can tell you what they want in a particular category, move on – you are already too late. Consumers have far too much choice to be worried about defining what they want in an unknowable future.

Consumers expect a degree of innovation and speed that western consumers struggle to keep up with. Western brands succeed in China when they change the rules, break convention and surprise the consumer. Consumers are hungry for change and tend to engage with brands that marry innovation with cultural insight to create something new.

That’s not to say heritage is unimportant – it is very important, but heritage has to be authentic and relevant. Many Chinese brands have huge amounts of heritage and are deeply imbedded in to the culture. Yes, fully-imported luxury brands, manufactured at their point of origin have huge and relevant heritage. But a brand from overseas, manufactured locally and distributed locally, can expect to be admired but a foreign origin business in China is nowhere near enough to succeed in China these days.

A few thought-starters might help.

The shelf is hugely important for business in China. Consumers explore and educate themselves at the point of purchase. They spend far more time shopping a category than is typical in the west. They engage fully with the category and are very heavily influenced by what they see at the shelf. Chinese consumers do not buy based on habit, they buy based on clarity and information at the point of purchase.

Think about the supermarket as an opportunity to communicate, engage and excite. Consumers are there to be entertained, not simply to shop.

Packaging design is often very high quality. In the majority of categories, consumer expectations of packaging are very high. It’s not all red and gold as western stereotypes would think. Consumers like packaging. They have been exposed to the best packaging the world has to offer for more than 30 years now. It should also be remembered that some of the best and most sophisticated packaging in the world is being created by local Chinese brands, in categories such as tea, rice wine and rice.

Use packaging design as the central strategy to connect with the consumer. If design is weak at the point of purchase, all other activity will be wasted.

Consumers buy in the context of the overall experience. Chinese supermarkets and stores are visually noisy places filled to the brim with vivid colour and excitement. Categories often contain huge numbers of competing brands each battling for a slice of the pie. The overall impact of the shopping environment can have a big impact on the way consumers shop individual categories as they shop the category in the context of the overall store.

Don’t develop products out of context.

People don’t buy things sitting around a table in a windowless room. Understand how the total experience impacts on the products you are selling.

Chinese consumers are very visually literate. Chinese calligraphy is a symbol-based writing system. Each character is effectively a stylised picture. Chinese consumers live in a visual world and as such are very adept at understanding and relating to graphic language. Design should never be dumbed down in China, design needs to operate at a sophisticated level.

Success for western brands doing business in China tends to be dictated by their ability to blend developed market design thinking with local insight. Global agencies and local teams have to work together to achieve results.

Brands need to be committed and culturally sympathetic. It is unreasonable to assume that any foreign brand can truly create deep cultural relevance in China, certainly in the foreseeable future. Chinese culture is very complex, but western brands should not feel they need to conform or try to localise. Foreign brands are foreign, this is not a bad thing. What consumers do expect is that a brand will have a long-term commitment to them and their country and will try to sympathise and empathise with the culture they want to be part of. Brands should be proud of who they are, but if you want to go to China, commit fully.

Believe in something. If you are just there to make money off the Chinese, it is unlikely you will succeed.

Ask yourself what role you are playing in the market and why people should engage with you.

It is actually very unlikely that Deng Xiaoping ever said “to get rich is glorious”, but he did understand the importance of a market economy to the future of China. This insight has changed the world, and Chinese consumers now provide the growth for many of the worlds most famous brands, facing stagnant or declining traditional markets.

China remains an opportunity. It is not the limitless opportunity suggested by many, but it is also not the huge challenge suggested by others.

Yes, the Chinese consumer is different, but aren’t we all? Like the rest of the world, the typical Chinese does feel that to go shopping is glorious.

Mark Kennedy is brand development director at Added Value and Derek Samuel is creative director at Designworks.

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